Came across this article on cricinfo written by the resident editor of cricinfo Pakistan.
Cricinfo - A devastating decision
Unless you live in Pakistan, or have been here through the madness of the last year or so, it will be impossible to understand the despondency the decision to postpone the Champions Trophy is likely to cause.
For one, it is actually a cancellation. Next year has enough action to fill a John Woo trilogy. Fitting a tournament into it is harder than getting Oprah Winfrey into one of Kate Moss' dresses. And the only thing more useless than the Champions Trophy in some eyes is two Champions Trophies in two years: one is scheduled to be held in 2010.
But this decision also essentially sets in stone a future policy for all non-Asian nations now: there is no need to tour Pakistan. The war on terror Pakistan is leading will not end overnight, because such nebulous wars don't. At best, within this country, it will have to be managed so that interference with life's everyday grind is minimal. Expect stories that Pakistan's place as co-hosts of the 2011 World Cup is under threat to be churned out from next year.
THats probably true, i don't see how Pakistan will change in 2 years to be ready with all security affarangements for the 2011 world cup. Judging by precedence, there might well be some countries who will decide not to play in Pakistan even then(like it happened with Sri lanka).
As such the author also compares pakistan with India
Incidentally it was players from these countries who didn't mind the bombs in Jaipur during the IPL. The context may be different, sure, but how much does that really matter? A bomb after all is a bomb, in India or Pakistan, whether suicide or planted, one of a series or solitary, and equally likely to cause damage. Perhaps next time Pakistan should dangle a bagful of dollars in front of players rather than inviting tedious security assessments.

I think more than the money India is a bit bigger country and certainly not at the "forefront of the war on terror" where there is a risk of any tom dick and harry blowing a bomb.
Pakistanis are fond of asking what actually unites and defines them. Some say there are many things, some say there are barely any, but cricket is a given, in both cases, a bond of some kind. It has always pulled people here together, however briefly, in joy, in grief, in celebration, in outrage. It has been played with verve for much of the country's history, and talked, argued, shouted and screamed about with greater passion. It is one constant in a land of very few.
For that to be taken away, at this time, when it was probably most needed, the disappointment, the anger, the frustration and the ensuing depression of that will not be understood by people outside Pakistan. It is time that it was.
^^ Thats true and thats one more political reasons that tacit support for terror without thought of the future, comes back to haunt you as its doing Pakistan.